In the just concluded week, the equities market demonstrated a lackluster performance, with market participants focusing on the audited accounts of banks ahead of the impending monetary policy committee meeting.
This led to cautious positioning amidst low traded volumes and a mildly positive market breadth.
The benchmark index experienced a decline of 0.42 percent week-on-week to 104,647.37 points despite a strong interest in financial stocks, driven by recent developments regarding the apex bank’s efforts to clear FX backlogs worth 47 billion.
This initiative aimed to attract foreign investors and ensure the stability of the local currency, resulting in notable accretion in the Naira.
However, the total market capitalization of listed equities also saw a decrease by 0.42 percent week -on-week, reaching N59.17 trillion.
Consequently, investors witnessed a significant year-to-date return of 39.95 percent, leading to a collective wealth depletion of N247.6 billion.
Trading activity remained subdued throughout the week, with weekly traded volume and value declining by 2.14 percent and 7.78 percent week-on-week to 1.74 billion units and N48.76 billion, respectively. However, total weekly deals increased by 1.17 percent week-on-week to 45,237 deals.
Sectoral performance for the week was mostly positive, except for the CONSUMER GOODS index, which recorded a modest loss of 0.37 percent week-on-week.
This was attributed to adverse price movements in PZ CUSSONS following disapproval from the SEC regarding their plan to buy out minority shareholders. Conversely, the BANKING, INSURANCE, INDUSTRIAL, and OIL & GAS sectors experienced gains, driven by upward movements in the prices of key stocks.
Individual stock performances varied, with JULI Plc, NEM, INTENEGINS, JAIZBANK, and INTBREW leading the gainers with notable share price advances.
On the other hand, JBERGER, DAARCOMM, DEAPCAP, MTNN, and PZ CUSSONS emerged as major losers, contributing to notable price declines week-on-week.
Stock market analysts at Cowry Assets Management Limited in a report that reviews the performance of the stock market in the period, anticipate a mixed outing in the equities market following the outcome of the monetary policy committee meeting this week. “Expectations for upward movement in interest rates may influence market sentiment.
However, we anticipate continued portfolio rebalancing activities as we approach the end of the first quarter of 2024. Fund managers are likely to engage in window dressing activities ahead of Q1 corporate releases and dividend earning seasons,” they said.
Meanwhile, the analysts continue to advise investors on taking positions in stocks with sound fundamentals.
Meanwhile, global equities posted mixed performances this week as investors assessed the central bank’s policy administration path, while anticipating inflation data from the US (Personal consumption expenditures price index) and Eurozone.
Accordingly, US equities (DJIA: +0.7%; S&P 500: +0.3%) rebounded from the losses recorded earlier in the week following optimism over the economy and interest rate cuts. European equities (STOXX Europe: +0.4%; FTSE 100: 0.0%) traded with mixed sentiments as optimism about potential interest rate reductions were tempered by news of the UK entering a recession in H2-23, and disappointing German retail sales data. Asian equities (Nikkei 225: -1.8%; SSE: -1.1%) saw broad declines this week due to profit-taking in Japan, concerns over potential yen-buying intervention, and bearish sentiments in China fueled by foreign outflows and Yuan weakness.
The negative sentiments in China (-1.1%) weighed on the Emerging Market (MSCI EM: -0.2%) index, while the Frontier Markets (MSCI FM: +0.4%) index closed higher, buoyed by bullish sentiment in Vietnam (+0.6%).
